Remarks: A Reset on Liquidity Regulation

As Prepared By: Secretary Scott BessentAs Delivered By: Under Secretary for Domestic Finance Jonathan McKernanThe Regulatory ResetGood afternoon, it is great to be here.Let me begin by thanking Hal Scott for convening this roundtable on bank liquidity and the lender of last resort.Under President Trump’s leadership, the Treasury Department has coordinated a fundamental reset of financial regulation. And the regulators have certainly not wasted time. They have ended decades of regulation by reflex and rolled back the Biden administration’s regulatory excesses.They have tackled the problem of “too small to succeed” and affirmed a commitment to preserving the community bank model.They have refocused bank supervision on material financial risk.They have recommitted to regulatory tailoring.They are clearing the way for digital assets and other responsible innovation.And very soon, they will propose a modernization of bank capital that simplifies and rationalizes the framework, ends the capital arbitrage that drives financial activity to nonbanks, and ensures competitive parity for smaller banks.Bank liquidity is the next big-ticket